English - Dairy Farmers of Ontario

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Back to Table of Contents16. Applicants are to send by registered mail, on or before October 31 of each year, in a single package:(a) an application form;(b) a 10-year business financial plan verified and signed by a certified accountant. The certified accountant isrequired to verify, in writing, that the business financial plan is legitimate and indicate per the assumptionsmade, that the business has the ability to generate profit.The business financial plan is a distinct document and must include the following sections:i) pro forma income statements, cash flow statements and balance sheets for the 10-yearperiod;ii) sufficient detail on the ownership structure and governance of the business;iii) a description of the proposed dairy enterprise;iv) a description of the assets to be employed;v) the location of the farm facility where milk will be produced and marketed;vi) if there is more than one lender, the provision of a liquidity order agreement signed by all lendersindicating the sources and the liquidity order. This applies to financial institutions and privatelenders (eg. family and/or friends);vii) the highest education achieved by the applicant(s); andviii) dairy and agricultural experience.Note: The business financial plan and agreement to providing financing cannot contain any contingencies suchas, “based on property appraisals.”(c) A cover letter signed by the lender(s) indicating:i) that they have been provided with a copy of and reviewed the business financial plan;ii) agreement to provide the financing that is required in the business financial plan; andiii) state the principal amount and term of the loan(s). This applies to both financial institutions andprivate lenders.Selection Process17. Only complete application packages as described in Section 16 will be considered for selection for theNEQAP.18. An independent third party will determine which applications meet the established criteria and if thereare more than 10 applicants who qualify, the third party will use a lottery system to select the successfulapplicants and will advise DFO of those who have been selected. The third party’s decision is final with noappeal or explanation required.19. Successful applicants will be notified in late December that they have been selected to participate in NEQAP.Acquiring Quota20. New entrants will have priority access to 12 kg of quota on the assigned exchange month.21. Starting with the March quota exchange month the new entrant will be given an assigned exchange monthbased on the order their application is selected in the lottery system. The new entrant is permitted to changetheir assigned exchange month with another new entrant on the condition that a signed letter by both partiesis submitted to DFO.22. Successful applicants must obtain their required quota (12 kilograms) on the assigned quota exchangemonth. If successful applicants bidding on the exchange do not acquire 12 kilograms of quota on the assignedexchange month due to their decision, they will no longer be eligible for quota under NEQAP.Quota and Milk Transportation Policies 22 July 1, 2010
Back to Table of Contents23. A new entrant’s bid will be cancelled if there is an insufficient volume available on a quota exchange to issueat least 0.1 kg of quota to all other successful buyers. The new entrant whose bid was cancelled will benotified immediately. If an exchange is cancelled, then new entrants will receive a new assigned exchangemonth.24. Subject to DFO issuing a licence to produce and market milk and approving an order to issue quota, DFOwill allocate up to 12 kg of quota to each successful applicant on the effective date of the initial acquisition ofquota.25. Once initial quota allotment has been received, new entrants are subject to general quota exchange policies.26. The allotment of quota through the NEQAP will coincide with the effective date of the acquisition of therequired 12 kg of quota by the successful applicant.27. DFO may provide quota to a new entrant for a period not exceeding sixteen years. Starting on the anniversarydate DFO will take back, from the quota provided in assistance, 0.1 kg per month to a maximum of 1 kg per12 month period, as indicated in Schedule A.Schedule AFrom the Start of Year(s)Maximum Assistance(kg quota)One to Five 12Six 11Seven 10Eight 9Nine 8Ten 7Eleven 6Twelve 5Thirteen 4Fourteen 3Fifteen 2Sixteen 1Seventeen 028. Starting with the March 2015 exchange, there is no maximum quota holding for new entrants. Meaning, quotaprovided in assistance will not be taken back if quota is purchased on the quota exchange.29. New entrants cannot conduct a quota transaction that would reduce their own quota below the minimum levelof 12 kilograms while receiving any quota in assistance. If a new entrant conducts a quota transaction andreduces their own quota below 12 kilograms, DFO will take back all quota provided in assistance.30. New entrants are not required to replace their own quota that is reduced through a general quota decreasethat applies to all producers.31. General increases or decreases will be applied to the new entrant’s saleable quota and not the quotaprovided by DFO in assistance.32. Quota provided in assistance to a new entrant is not transferrable and cannot be encumbered.33. New entrants cannot transfer quota to any other party, with the exception that a new entrant who receivesassistance can add their spouse to the licence.Quota and Milk Transportation Policies 23 July 1, 2010
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English - Dairy Farmers of Ontario

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